Everyone, welcome to this call. Sorry that we're a bit late. We had some technical problems here to start up. My name is Jesper Söderqvist, and I'm the CEO of Boule Diagnostics. With me here today at our headquarters in Spånga, I have our CFO, Christina Rubenhag. Switch slide. The agenda for today is as follows. We'll go through the financials for Q3. We will do a short introduction, mainly for those of you who are new to the company. After that, we'll also provide some insight to our updated strategy and our recent commercial and development activities. We will end this call with a Q&A. Let's get started.
The key highlight of this quarter is that we have seen a continued recovery in the market, and during the third quarter, both sales and order intake increased. All product lines grow in total 15% if you look in constant currency. The main highlights are really that the continued strong sales in the U.S. has continued, mainly driven by our OEM business. We have also seen that instrument sales have now grown for the fifth consecutive quarter since the dip in Q2 last year when we had the pandemic outbreak. Consumables is up 12% versus last year. It is still impacted by COVID restrictions, and it's mainly in some countries in Southeast Asia.
We have seen disturbance in the supply chain that has impacted our profitability, both by increased production costs, but also challenges in delivering our solutions to our customers around the world, which has impacted sales. Very positive that we continue to make progress on our strategic priorities, and I will come back to that later in this call. Also, thanks to a very good order intake, we're entering the fourth quarter with a record high order book. Let's look into some of the details for our financials. Sales amounted to SEK 112 million, which is 13% more than the same period last year, and in constant currency, it's 15%. Compared with the second quarter of this year, sales increased by 1%.
However, we had a more favorable product mix in this quarter, and particularly since we had more consumables, and consumables increased by 11%. We increased our gross margin, compared to the previous quarter with 3 percentage points, and that's despite the headwind that we have with higher component prices and a number of supply chain disturbances. Also, this quarter, we had a higher proportion of basic instruments, mainly to India, which also put pressure on our gross margin. This results in an operating profit of SEK 13 million, corresponding to a margin of 11.7%. We delivered an operating cash flow of SEK 10.6 million. We continue to make progress with our new product platform, and during the quarter, we invested SEK 11 million in new product development. Look at how sales has developed.
We have seen growth for all our product lines. Growth in instrument sales mainly came from Asia and Africa. Consumables are increasing or are stable, apart from a few countries in Southeast Asia, where sales decreased due to extended pandemic restrictions. In India, which is a big market for us, we saw that sales of consumables increased by a full 91% compared with the previous year. Our OEM business continued to develop very positively and increased by 44% during the quarter. In many of the developing countries, the vaccination rate is still low, with continued restrictions, which results in fewer patient visits and fewer diagnostic tests being performed. This continued to affect Boule as we have many active instruments in the developing countries.
In the slightly longer term, we expect that test volumes return to more normal levels in this country, and that will help both sales and profitability going forward. I'll turn to the next slide to look a bit more into our profitability. As you can see, it looks like we're lowering our profit, but actually last year, we had the Paycheck Protection Program loan of SEK 12 million from the U.S. government that was converted to revenue. The increased sales gave us SEK 6 million in contribution. Unfortunately, the shortage of electronic and other components has burned our gross margin and also expenses during the third quarter. The supply chain situation is challenging and creates significant challenges to both our development products but also our production.
I must say I'm very pleased and proud how the staff of Boule has managed these challenges during this year. As you can see, it burdens our profitability. I would also, you know, make a note of that we are delivering this result with this headwind, and at the same time, we're also conducting a number of improvement project and incurring costs for that to adapt the organization and also tools to equip Boule for the future. You know, I think we should be very pleased with this result. It looks very promising for the future. If you look at our cash flow in Q3, we generated about 10.6 million SEK in operating cash flow.
The financial position of Boule remains strong, and at the end of the third quarter, we had an available liquidity of SEK 82 million. Also during the period, we have taken up a loan of SEK 20 million to support our growth plans and our strategic investments. If you look at the total cash flow for the quarter is SEK 7 million. Let's take a look at the key priorities for the second half of this year, and I presented this slide in our call for the second quarter. I think we have made, you know, very good progress during this quarter. The supply chain is challenging, but we are adapting. We're working closely with our suppliers, providing longer term forecasts, finding new suppliers where needed, redesigning and changing components where necessary to meet the customer demand.
I think it's a challenge that continues, but we have managed it very well during the quarter. Russia is a market with significant potential for Boule, and during the quarter, our Russian domestic reagent production started, and we did our first customer deliveries in Russia in September. That was a great win for the team. Local production means immediate advantage in public procurement, also shorter lead time, and we will also lower transport costs and of course, that will also reduce our environmental impact from transport. These are very positive that we reached this milestone.
As I mentioned earlier, we are also making good progress with our next generation platform, and we have a intense development work in progress, and that's really creating the foundation for Boule to become a leading player in this decentralized blood testing with innovative new solutions in the future. We also had our new Marketing Manager, Mattias Isaksson, joining us, and that is the key in that we have a stronger marketing team that is working to reach out to customers and distributors worldwide. We are also now preparing for the launch in end of 2022 of our new products. A very welcome decision from European or proposal from European Commission is to change the implementation of IVDR, the new regulatory framework in Europe, to a more phased approach.
This means that we still need to update our quality systems and our processes and update our technical files for some of our products with lower risk class. However, this new rollout scheme means that we can continue to sell our products with a CE marking until 2022. This means less work for us the coming year, and that's very welcome since we're very busy with our other strategic activities. During the quarter, we established local presence in the Middle East and Africa with sales manager based in UAE and Kenya. This is a slightly longer-term venture, but we're already seeing new business opportunities in these regions. All in all, I would say it's a great performance of our organization. Let's look ahead to what we have around the corner in terms of priorities.
Our direction remains, and the coming key priorities are, we want to convert the large order book we have now in Q4 to revenue. We need to continue to manage the global supply chain situation. We will continue to progress with the IVDR readiness, but now based on this revised schedule. Of course, a lot of activities is related to the industrialization of our new platform. Now it also includes full speed ahead on development of our cloud solution that I will talk more about later in this call. We will continue to strengthen Boule based on the updated strategy that I will brief you on in the second part of this presentation. A little market outlook.
You know, we see positive trends across all our product lines and all our geographies, even if the recovery slowed down due to continued spread of COVID and related restrictions. For us, it's mainly Southeast Asia where we see an effect of that. COVID is there, and the pandemic will continue. I think there are some 6 million people with COVID currently, which is almost double what it was compared to a year ago. However, we see that societies are opening up thanks to the vaccines, but we have seen a good order intake during several quarters, and we have a large order book. Of course, we will continue to face challenges with our supply chain and transport, but you know, as I said, our staff has managed the situation very well.
With continued focus and hard work, I think we will manage well going forward. Also to note is that, you know, with reduced restrictions, test volumes will increase, and our install base will generate increased sales of high margin consumables. Let's shift topic and look at Boule today and see how we will develop the company longer term. Boule is a global niche player that provides near patient hematology diagnostics or blood testing that allows physicians to directly consult the patients without the need to wait for central lab or test results.
We have a large installed base of some 29,000 Boule instruments, which is a key driver for our strong and recurring aftermarket sales. Also in October, we celebrated, you know, Boule Diagnostics' 25th anniversary, and that was when Boule, you know, was created, and it became this focused hematology company. However, our history goes back to 1956 when the founder of Swelab Instrument, Erik Öhlin, developed Europe's first blood cell counter. Swelab and Medonic was two companies that we acquired, you know, soon after the creation of Boule. You know, we have a solid foundation on with a large installed base. We're present in more than 100 countries. We have strong, loyal partners that have been with us for many years.
We have, you know, a growing business both with our partners, but also our OEM sales. You know, we have a great history, we have strong product brands, and we have a solid plan for the future, which I now would like to discuss, here with you. First, let's look at the market that we address. We are present in two attractive markets, both in the human and veterinary hematology market. The human market for decentralized near-patient diagnostics has a total market value of approximately $650 million and is expected to grow approximately 5% per year. The growth drivers are the usual macro factors as an aging population globally and an increased standard of living, in particular in emerging economies.
The demand for healthcare will increase and also the demand for diagnostics and the type of diagnostics that we have are very cost-effective and gives a lot of information that can help physicians monitor and select treatment for patients. Also, digitization and new technology will create new opportunities and to create efficiency, which will also in turn lead to increased test volumes. If you look at the veterinary market, which is about 10% of our current business, and if you look at that market and it includes both hematology and clinical chemistry, it's almost as large a human market. The vet market is growing rapidly, as many people have acquired companion animals during the pandemic. Also access to insurance for companion animals provides an increasing demand for veterinary service and testing.
Today, Boule has a global market share of around 8% based on external market reports and in defined niches and in select geography, we are the market leader. Let us look now how we will continue to capture market share and grow the company into the future. The strategy that will take us from where we are today into the future is built on a few key elements. I, all the staff at Boule, and all our partners are motivated by a common purpose, and that is to provide versatile, high quality, near-patient diagnostic solutions for everyone, everywhere. We use a business model where we use partners for marketing, sales and service. We have a large installed base of instruments that use consumables that generate steady and growing recurring revenue.
We have strong product brands that gives us access to several market segments via parallel sales channels in many of the markets that we are present. We have also formulated aspirations that will help us set and deliver on our ambitious targets. Those are that we have the market's most satisfied customers. We are a highly valued employer that retain and attract the best talent in the market. We want to grow the 130 million tests done on Boule solutions today to 500 million tests sometime in the future. Our company culture is built on six core values that help us guide us in our daily work. To capture the potential we have in the market, we have formulated three strategic pillars to ensure profitable growth. In short, they are value creation for our end users and distributors.
We work closely with our distributors and focus our development on value-added services. Our product development and our innovation efforts focus on ease of use and reliability. We will also invest in sustainable product and service development in the years to come. We are determined to develop a relevant and competitive product portfolio based on Boule's proprietary technology, and sales will increasingly come from solutions newer than five years. Then we want to make a difference, and we want to deliver our high quality tests to more people around the world. We have one of our pillars is to increase the number of tests performed with our solutions. Based on this strategy, I want to share what we are working on here and now. You can see that this is not something that's going on in the future.
It's going on right now. Let's go to the next slide. We have since many years built local presence to ensure that we work closely with our sales partners and really understand the market dynamics, the end user need, and the business culture in the 100 countries that we operate in. We have sales offices in many of the markets around the globe. In the last quarter, we have increased our footprint and activities in three geographies. Russia is one of the markets where we have a significant potential, and a few years ago, we established a sales company in order to get closer to the market and distributors. During the quarter, our factory was completed, and the first customer deliveries of consumables were shipped from our new production facility to customers in Russia.
We also added a key account manager to promote Russian domestic consumables. We attended a major IVD congress in Russia just now at the beginning of October, and it was really good to see that, you know, the start of our production and our first customer delivery was really recognized by the market. I'm very optimistic, and I'm very pleased with the progress we made in Russia lately. We took the first steps to establish local presence in the Middle East and Africa with sales manager based in UAE and Kenya. Those are two interesting markets for the future where we will see growth in the segments that we are addressing.
It's a long-term venture, but I think we can already see now that the business opportunities are delivering , you know, also are converting to sales for us shorter term. Very pleased, you know, with the progress we made here to get closer to our users and distributors during this quarter. In addition to selling the instruments and the consumables, we have unique expertise in the company and we can generate and are generating more value to our partners and customers, and this will help us drive sales. We have continued to build our capabilities in Boule Academy by dedicating more resources to produce technical training, as well as supporting our distributors and end users with products, clinical and sales training.
We have held several successful webinars in the last quarter, and just today we have a seminar on applied hematology by one of our biomedical analytical experts to our sales partners, and I think there's some 60 people right now listening to that webinar. There's a lot of things going on, and really we are transforming the company from just focusing on product and more to deliver on solutions and really add value in many ways to our partners. The Boule Academy is one of the cornerstones in those efforts. Let's move to the next growth pillar, which is that we are determined to continue to invest into our product portfolio, to have a relevant portfolio for our market segment that is built on our own proprietary technology.
The investment that we're now doing in the new platform will enable our entire product portfolio to be upgraded over the next three to five years. We will leverage the platform and to broaden our portfolio. As you know, we have talked about earlier is that the first release is the five-part instruments. Also an integrated part of our new product platform is a cloud solution, and initially we will offer cloud services that are used for service and maintenance. Thereafter, new functionality will be added over time, and through connected services and training via Boule Academy, Boule will increase the customer value and create differentiated solutions. We are very focused now in hematology, fighting infectious diseases is really what this is about.
We also have the opportunity longer term to expand into near-patient diagnostics, where we have a lot of synergies in the markets and through our sales channels. In the third quarter, we delivered two major milestones. We completed a proof of concept for our new cloud solution, and we now have a team of developers realizing our first cloud solution release planned for end of next year. Of course, in addition, we are making good progress with our instruments and consumables development and we are heading into the industrialization, verification, and clinical validation of our new products. Very pleased with the progress the team is making and, you know, we are really delivering on bringing new products and solutions to market. We then move on to the third pillar.
As I talked about, the decentralized blood testing, an effective tool for screening during health checkups, but it's also very valuable tool to diagnose and monitor a wide range of diseases. Our long-term ambition is to continue to broaden our offering, with new products and related service in order to deliver a high-quality test to more people around the world. We set an aspiration to long term perform half a billion tests annually, you know, from the 130 million tests we're doing today. To deliver more tests and enhanced consumables, we will continue our expansion in emerging markets.
We will target segments of the market with high test volumes, and we will continue to expand our OEM business, where we sell consumables to other IVD companies. Through these efforts, we contribute to improved health and well-being with users receiving rapid test results that improve the efficiency of care, which also benefits the patients. A few milestones in the third quarter is that consumable sales grow by 12%. Our OEM business is up 44%. We started up several new distributors where we signed the distribution agreements in EMEA in the spring, and we have three new area sales managers that is now reaching out to the customer. We also see that our order book is filling up and that our consumables sales is coming back to levels equivalent to the levels we had before the pandemic started.
To summarize, short term, we have a large order book that we will convert to revenue. Mid-term, we have a high level of activity that will grow our business and make good progress with the first release on our new platform, and we'll see the first releases coming out end of next year. We are really executing our updated strategy. We look forward with confidence to the end of 2021 and the years to come. With that, I would like to thank you for your attention and open up for questions. Anyone who wants to start?
Hi, I can start. It's Jakob at ABG.
Thank you. Please.
Ju st on the market development in the quarter, can you say anything about how the sort of testing volumes or demands for consumables have developed during the quarter if you perhaps exited the quarter at a higher level than going into the quarter?
I would say so. As you can see, I mean, I think if you look at our rolling twelve months consumables sales, you can see that we have turned a corner two quarters ago, and we are seeing, you know, increase in consumables sales. We also see that we have, as you saw, a larger portion of consumables in our revenue this quarter and also in our order book going forward.
The quarter saw, I mean, continued strong sales from the OEM business. Maybe you could just give some more flavor on the underlying dynamics driving that.
I think you know we see a lot of opportunities in our OEM business, and what we see revenue from is really mainly from one customer, and that is related to the agreement that we signed last summer, like a year ago, where we provide consumables to a new product family that they are now launching worldwide. You know, we see a positive momentum from all our current customers, and I think we also have a pipeline of new projects. Of course, several of these new opportunities will take several years before they, you know, show up in our revenue. But it's a, you know, very positive development.
Okay, and just lastly on the new product platform, when could we potentially see some more public marketing opportunities there? Or you talking about it more publicly?
Well, as we said, I mean, we plan to launch at towards the end of next year. That's the time when we will, you know, be more specific on what we're doing. S o that's what we're working on. I think we are investing, and we're making good progress, and we, you know, we're taking the milestones. You know, towards the end of next year, you will hear more.
Okay. Thank you very much. That was all the questions I had today.
Thank you, Jakob. Who wants to go next? Are there any more questions? Björn was raising his hand. Your mic is muted, Björn.
Yes. Thank you for taking my questions. I hoped someone else would ask them. First of all, the challenges regarding the sales in the third quarter, could that be quantified in any way, how much that affected negatively?
I think it's very difficult to say exactly. We, you know, pushed some orders out from the third quarter to the fourth quarter. You can see that it, we and the market in general have longer lead times. I think what we see is also that the customers are getting more accustomed to longer lead times. It's very difficult to quantify, but it's clear that if we had, you know, higher production capacity, we could deliver more, and we could also, you know, generate more orders. Really now the limitations are more on the transport and logistics and supply chain challenges.
The actual follow-up on that is, how do you think that will affect the fourth quarter? I mean, some of these challenges still remains, I suppose. I mean, it could be seen in two ways. I mean, too low sales in third quarter would affect the fourth quarter positively, or these challenges remain and we will also see a sort of a low Q4.
Well, as I said, we have a very good order book and it's a larger order book, you know, going into Q4 than we had going into the third quarter. I think it's very difficult to answer that question because what's happening now with the supply chain disturbances is that you don't really know. I mean, you know, you discover from one day to the next day that suddenly, you know, some deliveries is not coming and it could be delayed. You know, it's you have to constantly kind of live with this unexpected. It's not working like normal, so it's very difficult to quantify.
Clearly there are some risks, you know, in terms of getting all the supplies that we need. I mean, well, I allude a little bit to how we are managed here in the second and third quarter that we have gone through many of these challenges and we have managed to, you know, work around these things. It's hard work and it's new challenges every day. The team seems to, you know, take on those challenges and we have managed very well so far.
Another thing, sort of slightly related to that, is I try to get my head around this. I mean, you state that you have a solid sort of backlog. But still the accounts receivable are the lowest levels in 10 years on an individual quarter. Could that be explained in a way?
I think since we have seen we use EKN, Exportkreditnämnden to help finance sales to, in particular, you know, to the Asian countries and emerging economies. We had pretty large sales. When we use that, we receive like a significant part of the revenue immediately. That is really what you see.
But it's a big change. I mean, we haven't seen these low levels in 10 years. It's something that's obviously.
It's something that's obviously.
We can move on.
I think, I mean, maybe Christina, maybe you could comment on that. I'll just tell her. I'll use Christina here.
Hi, everyone. No, I think that as you know, we have been focusing on working capital of course during this period as well. Most likely that is also what is giving effect that we actually have been very good in collecting accounts receivable as well.
I would have expected some late invoicing, visible in that figure, but perhaps not. We can move on to my last question. It's regarding the gross margin. There are obviously some challenges and so on, but it's not really that visible in the actual numbers. I mean, it's a pretty good gross margin despite all the challenges. Should that be viewed as an indication of underlying gross margin being, I mean, will come up when things normalize, if they normalize?
Well, I think, you know, we can be sure that things will normalize. The question is when? Yes, I think we are. If we wouldn't have the challenges we had and the additional cost, we would see a gross margin increase. Everything is pointing in the right direction. We just have to get rid of this pandemic.
Sounds great.
We are doing good. Okay. Thank you.
Okay. Thank you.
Who wants to go next? Please raise your hand and speak up. Okay. It seems that there's no more questions. I would like to thank you very much for the attention and for being here with us today. I wish you have a great day. Take care. Bye-bye.